March 5, 2018 marked three years since I became debt free. Those three years have flown by! The first two years, I was still reveling in the idea of being debt free and how much freedom I have felt since paying off my last debt. It’s like I was in the honeymoon phase of reaching my financial goal and I was still on that high of having no debt payments and realizing that I had so many options with my money! 

Year Three has become my reality check year. The behaviors that I had seemed to master during my debt payoff and shortly after had started to slip away. It became very comfortable to be debt free and as a result, I got sloppy with my spending. It’s very similar to reaching a weight loss goal. You have been so careful and tracking all of your food and exercise. You’ve been focused on what you have been eating and how much you are moving. You hit your weight loss goal with great fanfare and excitement – and then you being to backslide, eating more dessert than you are used to and skipping the gym more frequently. This is what happened to me with my spending.  

However, there were accomplishments as well. I significantly increased my giving not only to charitable organizations but just in daily life when I saw a need that needed to be met. Once again, I maxed out my IRA and opened a brokerage account to invest in mutual funds (non-retirement investing). And I have begun the journey to total self-employment, which is both exciting and scary at the same time. 

Here are my biggest takeaways for Year Three: 

The temptation to spend is still there. I have blogged before about my decision to not use credit cards and my reasons why. Part of that reasons is that I had to create boundaries so that I wouldn’t go back into debt. Alcoholics give up alcohol, drug addicts give up drugs – I had to give up the means that made it easy for me to spend out of control with no immediate recourse. After becoming debt free, you suddenly have the cash flow from the former debt payments to use however you wish. With that freedom comes a lot of responsibility and options. It’s easy to let it slip through your fingers. And suddenly purchases that were non-negotiable to justify during the debt payoff season are now scarily easy with no afterthought. 

The temptation to go back into debt has come back. This hasn’t happened too often but enough that I have to remind myself why I got out of debt and why I don’t need or want to finance the shiny new car or the latest and greatest electronics. I know that deep down that I don’t need these things immediately and that buying them without debt is much more rewarding. It’s being surrounded by a culture – especially in South Florida where I live – that encourages bigger and newer with no concern about the total cost. This is why I have instituted a waiting period for myself on larger purchases. If I want to buy something that costs more than $100, I have to wait at least 24 hours before making the purchase. If the purchase is greater than $500, I have to wait at least 48 hours before I can make the purchase. Putting these rules in place have eliminated the impulse purchasing that got me into debt and it allows me time to reflect on whether I really need the item or if I am acting purely based on my emotions. 

It’s become easier to be lazy with finances. When I was getting out of debt, I was so careful about every dollar and penny going through my fingers because I had a big goal and milestone to reach. Once the goal was achieved, it was very easy to become lax with careful spending and being mindful and intentional because I no longer had the weight of the debt on me. I needed a new goal to work towards. In addition to staying within reasonable spending, I also wanted to give more and to invest (general and retirement) so I made sure to earmark funds for those priorities before determining what to spend in a given month. I have now been able to re-focus my spending because of these new goals. 

Investing has become a huge priority. My new focus has turned to investing. My goal this past year was to buy a home but with the rising home prices in my area, I am not sure when it will happen. However, I don’t want my money to just sit in a money market account so I am investing it to make my money grow in the meantime. I have been maxing out my IRA account (retirement) for the past couple of years. This past year I opened a brokerage account so I could also invest in mutual funds (non-retirement). I also continue to build up cash reserves for other investment opportunities that may come my way. Being debt free and building up cash has allowed me to take advantage of investment opportunities that come my way. Real estate property will be the next area that I will look for investment opportunities. 

The planning for a change in lifestyle has begun. I have spent nearly twenty years in the corporate world. I have gone through my share of job changes, job loss, promotions, and transitions. What I have realized becoming debt free is that I have a better opportunity to design a work life that accommodates my whole life. I attended the START Conference back in 2013 and that was the goal I wrote on my attendee badge. 

My whole reason for getting out of debt so I could have a life that didn’t revolve around having to climb the corporate ladder and to have more say and flexibility as to how I would live my life. For the past three years I have been working on contract at a Fortune 500 company. I negotiated my own rate, I have the flexibility to take time off when I want to (unpaid, of course), and I have begun working on multiple income streams to lead to total self-employment in the next year or so.  

Just like weight loss, reaching your goal of being debt free (or your goal weight) is difficult, but staying debt free (or keeping the weight off) is just as challenging. This next year will be all about getting back to the basics – creating a spending plan each month and executing the plan to reach the near-term financial goals I have. My focus will also be on building my side hustles so that I can achieve work freedom as well. I will be writing more about my own current personal journey throughout the year. 

Three years have flown by and I am looking forward to what Year Four brings this next year!